CAPITAL EYES-In the Deep End

Montana swims with the sharks in the global marketplace

Day after day it becomes more apparent that the problems facing our fair state have transcended traditional political boundaries. Both parties are struggling to deal with a budget situation which, only six months ago, projected state surpluses. Instead, the Legislature now faces a grim struggle for survival. Likewise, the endless campaign promises of economic development by candidates from both parties have now given way to a desperate state of economic triage. Unfortunately, even at this level we are losing ground as utility prices spiral and state revenues fall behind expenses. Like banana republics where political leaders and markets are manipulated by forces beyond the control of the populace, we seem to have lost control over our own future.

In Montana’s 13th consecutive year under Republican governors, their free market economic theories are crashing in brutal collisions with the reality of global markets. As the big fish gobble up the little fish, Montanans are beginning to realize what tiny minnows we are in the big ocean of the multinational marketplace. Unfortunately, when the economic theories of the politicians fail, it is real Montanans and their families, virtually all little fish, who pay the price.

Want a humbling perspective on our dilemma? Go to the website of PPL Global, the company that gobbled up Montana Power Company’s electrical generating facilities, and take a look around—you’ll be shocked. In a small subsection of the hydropower subsection, PPL says it uses just 50 people to operate 474 megawatts worth of hydro facilities in Montana—what they call “among the lowest cost hydro portfolios in the country.” Then consider that Montana Resources laid off seven times that many people—329 workers in Butte—because they couldn’t afford the price of the electricity produced by Montana’s dams. The same holds true for hundreds of other industrial workers around the state and will soon be a grim reality for small businesses and homeowners when the rate cap on electricity prices comes off in 2002. We will be left swimming in the deep and guess what? Those big fish have sharp teeth and aren’t one bit worried about Montana’s future.

Does all this seem familiar? It will if you are a student of Montana history or have been around long enough to remember what it was like when the Copper Kings ruled the state—or the various permutations of robber barons who have treated Montana like a resource colony for the last century and a half. The old barons made their fortunes on Montana’s resources. But they left behind the toxic legacy of the Berkeley Pit, Anaconda Smelter, Clark Fork River and Milltown Dam—collectively, the largest Superfund site in the nation. Montana was there for the taking, and they took as much as they could.

Thanks to recent disastrous policy decisions, the new energy barons have us firmly by the bulbs—and they are squeezing. Unlike corrupt leaders in a banana republic that need to be bribed, our legislative leaders freely offer up our tax base, water, air, coal, natural gas and coal-bed methane resources on the premise, not promise, of a better economy. Won’t we ever learn?

The 1995 Legislature slashed water quality laws at the behest of mining companies. In return, when the price of gold collapsed, the mining companies shut down, leaving us with expensive toxic messes to clean up. Did we then return the water quality laws to their former high standards? No, we did not. Having given away hundreds of millions in tax breaks that have failed to generate economic activity (but succeeded in funneling much-needed revenue to out-of-state corporations), legislators now want to provide even more tax breaks and loans. This time, it’s to build new, parallel energy systems—in spite of the fact that everyone agrees Montana makes twice as much energy as we need. Ironically, by the time the new, unnecessary generation comes online, and the theoretical surplus finally drives the prices down, it will be too late for many Montana industries, businesses, farms, ranches and families.

In the coming days, the Montana House of Representatives will begin a long and bitter debate on the main budget bill. There will be much wailing and gnashing of teeth as competing interests fight over the scraps our unbalanced fiscal system has produced. Many will question the priorities of our decision-makers—as should we all. Montana is at a crossroads. We can, and should, take back control over our own energy resources, and in so doing, take back control over our future. We can capitalize on our reputation as a clean and healthful state. Or, we can trade it all in for a handful of promises, returning to the bad old days when the rivers were full of poisons, the sky full of toxic smoke, and the workers just so much fodder to be tossed into the gears of the money-making machines owned by out-of-state corporations.

Our economy continues to be ravaged by the harsh realities of regional, national and global markets—but continuing on our present course won’t change a thing. We could flat out give our natural resources away and it wouldn’t make a blip in world prices for oil, gas, coal, or energy. Nonetheless, our lawmakers continue to thrash along, trying but failing to keep up with the nation’s economic vitality. In the meantime, a growing pack of Wall Street sharks follows in our pitiful wake, picking off our valuable resource assets one by one. As Montanans watch this policy disaster in the making, one phrase seems apropos: “Devil take the hindmost.” These days, that would be us.
George Ochenski has lobbied the Montana Legislature since 1985. He is currently working as a lobbyist for a consortium of Montana’s tribes.